Delaware IP Law Blog

Magistrate Judge Mary Pat Thynge issued a memorandum order yesterday in Masimo Corp. v. Philips Electronics North America Corp., C.A. No. 09-80-JJF-MPT (D. Del. Mar. 11, 2010), granting a motion by plaintiff Masimo to bifurcate and stay discovery of Philips' antitrust counterclaims. Id. at 10. Magistrate Judge Thynge noted that "Bifurcation of patent and antitrust claims is not mandatory, but is common," id. at 3-4, and that, absent bifurcation, the jury might have comprehension difficulties (from the volume of information, including 24 asserted patents) and might be subject to bias against the plaintiff (from the defendant's allegations of monopolization). Id. at 3. Discovery and related issues were also stayed, because "there is a possibility that a trial on [the] patent claims will potentially eliminate or simplify [the] antitrust counterclaims alleging anticompetitive licensing restrictions." Id. at 8. This opinion mirrors a decision by Judge Robinson that we reported last year.

Masimo Corp. v. Philips Electronics North America Corp., C.A. No. 09-80-JJF-MPT (D. Del. Mar. 11, 2010)

A recent decision by Magistrate Judge Mary Pat Thynge puts to rest the notion that a district court will follow an anticipated change in the law when considering a post-verdict motion for judgment as a matter of law. In its decision, the Court acknowledged that, just last month, the Federal Circuit heard argument on whether Section 112 contains a written-description requirement distinct from the enablement requirement. The resulting "expected intervening change in the law," however, was insufficient to warrant immediate judicial recognition:

"It is the court's opinion that an expectation of change does not constitute an intervening change. . . . The court recognizes that the Federal Circuit has heard oral argument in Ariad Pharms., Inc. v. Eli Lilly & Co. and that the Federal Circuit's forthcoming decision in that case may alter the scope and purpose of the written description requirement. However, this court . . . is constrained to follow existing standards under Federal Circuit law, and Federal Circuit precedent 'clearly recognizes a separate written description requirement.' " (slip op. at 19)

Cordance Corp. v. Amazon.com Inc., C.A. No. 06-491-MPT (D. Del. Feb. 22, 2010) (Thynge, M.J.).

Magistrate Judge Thynge recently issued an opinion in Inline Connection Corporation v. Earthlink, C.A. No. 02-272-MPT (D. Del. Feb. 5, 2010). The opinion addressed several issues (see full opinion below); one interesting issue involved the law regarding a "practicing the prior art" defense.

In this case, the jury found that the patent was both invalid and not infringed. Id. at 11. The patentee sought to rescue their patent via a motion for judgment as a matter of law (JMOL) that the patent was not invalid, because the defendant's expert had failed to "identify each claim element, state the witnesses' interpretation of the claim element, and explain in detail how each claim element is disclosed in the prior art reference," as required by Koito Mfg. Co., Ltd. v. Turn-Key-Tech, LLC, 381 F.3d 1142, 1152 (Fed. Cir. 2004). Id. at 21. The Court agreed.

Defendant Earthlink then tried to put on a "'practicing the prior art' defense," arguing that "its [product] is “materially identical” [to the prior art] and, thus, 'if [its product] were found to infringe, then the patent claims that are at issue would have to be invalid,'" but the Court disagreed. The Court pointed out that "[t]he Federal Circuit [has] stated that 'this court has made clear that there is no ‘practicing the prior art’ defense to literal infringement," Koito at 1153, and that all of the other cases cited by Earthlink for its "practicing the prior art" defense involved situations where the accused product was the prior art - i.e., it was invented or on sale before the priority date. Thus, the Court granted the JMOL motion.

This shows that you should not rely on a pure "practicing the prior art" defense, despite its apparent logic (after all, how can a patentee have patented something that existed in the prior art?), unless your actual product is the prior art.

Inline Connection Corporation v. Earthlink, C.A. No. 02-272-MPT (D. Del. Feb. 5, 2010)

In Crown Packaging Technology, et al. v. Rexam Beverage Can Co., C.A. No. 05-608-MPT, D. Del. Jan. 15, 2010, Magistrate Judge Thynge recently granted counterclaim-defendant Crown’s motion for summary judgment based on laches. This case returned to Judge Thynge after the Federal Circuit reversed the Court’s grant of Rexam’s summary judgment motion of noninfringement and the Court’s grant of Crown’s motion for summary judgment for failure to mark, thereby dismissing Rexam’s counterclaim. Id. at 2. After the parties stipulated to dismiss Crown’s claim of infringement, the only issue remaining in dispute was Rexam’s counterclaim of infringement. Id. at 3.

The parties are in the business of manufacturing and selling aluminum cans. Pursuant to its summary judgment motion, Crown argued that Rexam impermissibly delayed in filing its counterclaim because more than six years had passed between any infringement and the filing. Id. at 12. Finding in Crown’s favor, the court noted that “[a]lthough can manufacturing is squarely within Rexam’s field of endeavor, a field populated by very few competitors, and Crown’s activities in that field were open, pervasive, and notorious, Rexam never undertook any investigation of the circumstances associated with Crown’s alleged infringing activities. . . . Further, because Rexam delayed more than six years before filing its counterclaim, this court presumes that the delay was both unreasonable and prejudicial.” Id. at 17 (emphasis in original). Furthermore, Rexam failed to produce sufficient evidence that its delay was reasonable or whether any prejudice exists. Id. at 18-21.

Crown Packaging Technology, et al. v. Rexam Beverage Can Co., C.A. No. 05-608-MPT, D. Del. Jan. 15, 2010

Magistrate Judge Mary Pat Thynge issued a claim construction order in the Innovative Patents, L.L.C. v. Brain-Pad, Inc. matter which involves a patent for an apparatus that enhances absorption and dissipation of impact forces for sweatbands (U.S. Patent No. 7,234,174). C.A. No. 07-680-MPT, Memorandum Order (D. Del. Jan. 13, 2010). The following claims were construed consistent with Phillips v. AWH Corp.:

- "sweatband"
- "relatively thin in nature"
- "curved in configuration"
- "intended area"
- "consistent memory"
- "semi-rigid"
- "apertures"

Of interest, for each claim term, the Court declined to adopt the parties' proposed construction and instead adopted its own meaning.

Innovative Patents, L.L.C. v. Brain-Pad, Inc., C.A. No. 07-680-MPT, Memorandum Order (D. Del. Jan. 13, 2010).

In this patent infringement action, Quantum Loyalty Systems, Inc., et al. v. TPG Rewards, Inc., et al., C.A. No. 09-022-SLR-MPT (D. Del. Dec. 23, 2009), Defendant John Galinos (“Galinos”) moved to dismiss plaintiffs’ complaint for lack of personal jurisdiction and Defendants TPG Rewards, Inc. (“TPG”) and Galinos (collectively “Defendants”) moved to dismiss plaintiffs’ complaint for failure to state a claim for which relief may be granted. Regarding Galinos jurisdiction motion, Judge Thynge noted that the specific jurisdiction provisions of the Delaware long arm statute, 10 Del. C. § 3104(c)(1) and (c)(3), require plaintiff to prove a “nexus between the cause of action and the conduct used as the basis for jurisdiction.” Id. at 11 (internal quotation omitted). However, plaintiffs only allegation in support of jurisdiction was that Galinos incorporated TPG in Delaware, despite that the cause of action for patent infringement “[did] not arise from the act of incorporating.” Id. Furthermore, “the fiduciary shield doctrine prohibits acts performed by an individual in the individual’s capacity as a corporate employee from serving as the basis for personal jurisdiction over that individual.” Id. (internal quotation omitted). Plaintiffs alleged no facts “Galinos personally made, used, offered to sell, or sold any alleged infringing product in Delaware.” Id. at 12. Furthermore, plaintiffs failed to point to any support for the contention that any injury, under 10 Del. C. § 3104(c)(3), occurred in Delaware. Id. In fact, plaintiffs were incorporated in Nevada and had a principal place of business in Nevada, such that any injury would have occurred in Nevada. Id. at 12-13.

After finding that plaintiffs also failed to allege sufficient contacts to support a finding of general jurisdiction, Judge Thynge recommended the Court grant Defendants’ motion to dismiss for failure to state a claim because the facts support the conclusion that plaintiff claimed “infringement by a product whose only appearance in the market preceded the critical date of the patent-in-suit.” Id. at 21-22. “[P]roof that [defendants’] product infringes [plaintiffs’] patent would also prove that the product anticipates under 35 U.S.C. § 102(b) . . . .” Id. at 22.

Quantum Loyalty Systems, Inc., et al. v. TPG Rewards, Inc., et al., C.A. No. 09-022-SLR-MPT (D. Del. Dec. 23, 2009)

In document discovery, relevance is broadly construed. But the doctrine has its limits. In a recent decision by magistrate judge Mary Pat Thynge, the Court rejected as irrelevant a request for documents concerning certain properties embodied in two prior art products. According to the Court, the request, made in part to support assertions of obviousness, could not illuminate the sufficiency of the defense:

"That the inherent teaching of a prior art reference is applicable to obviousness does not make the information requested by Mylan relevant since . . . obviousness is an objective legal construct, measured by whether the inherency would have been obvious to one skilled in the art."

As a result, the Court held that, as a matter of law, the requested documents were irrelevant to the issue of obviousness.

Eurand Inc. v. Mylan Pharma. Inc., C.A. No. 08-889-SLR (D. Del. Dec. 9, 2009) (Thynge, M.J.).

A recent sanctions order issued by Magistrate Judge Mary Pat Thynge reaffirms a basic discovery principle: the 30(b)(6) witness must be prepared, regardless of the size and resources of the entity for whom the witness speaks.

In yesterday's order, the Court awarded $15,000 in fees and costs to the deposing party, in part to compensate for the second deposition necessitated by the ill-prepared witness. By doing so, the Court noted, but ultimately ignored, the proffering entity's small size:

"[W]hat is also abundantly clear[ ] is that plaintiffs are two small corporations with essentially three people at the helm, whose division of responsibility at times is blurred and not clearly defined . . . . To some extent, plaintiffs are slightly a cut above a 'mom and pop' operation. . . . However, that does not excuse representing an individual . . . as being proficient and knowledgeable to testify on numerous topics, when her acquaintance with certain areas was very limited or non-existent."

Innovative Patents L.L.C. v. Brain-Pad Inc., C.A. No. 07-680-MPT (D. Del. Nov. 4, 2009) (Thynge, M.J.).

On August 18, 2009, a Delaware jury returned a verdict finding that Amazon.com, Inc. did not infringe two of the three patents owned and asserted by Cordance Corporation. The jury found those two patents valid. The jury did find that Amazon.com infringed 4 of 5 asserted claims of the third patent-in-suit but that was the same patent that the jury found invalid. The verdict form is attached below.

Cordance Corp. v. Amazon.com, Inc., C.A. No. 06-491-MPT, Verdict Form (D. Del. Aug. 18, 2009).

The Federal Rules of Civil Procedure provide a trial judge with the ability to manage the presentation of a trial, particularly where complex matters are being tried before a jury. Patent misuse is a defense that courts have held can be tried to the jury or to the judge. Judge Thynge in Cordance Corporation v. Amazon.com, Inc., C.A. No. 06-491-MPT, Memo. Order (D. Del. July 28, 2009), was faced with the question of whether Amazon's defense of patent misuse should be tried before the jury or the bench. "[C]onsidering the Einsteinian analysis and Herculean task that Amazon is assigning to the jury by its proposed verdict form consisting of 14 pages with 20 questions containing over 160 subparts just to determine infringement and invalidity..." the Court chose not to "further burden and (potentially confuse) the jury with patent misuse" and therefore, that defense will be tried to the Court. Id. at 3.

In another portion of the opinion, the Court also found that plaintiff is only entitled to damages for infringement from the time the USPTO issued a certificate of correction for the patent-in-suit. Id. at 6. The corrections do not apply retroactively and prior to trial Cordance never articulated an infringement theory based on the uncorrected claims. Id. Thus, the damages period only runs from the date the PTO issued the certificate of correction.

Cordance Corporation v. Amazon.com, Inc., C.A. No. 06-491-MPT, Memo. Order (D. Del. July 28, 2009).

In what is one of the first lengthy discussions on willful infringement from this District since the Federal Circuit issued its opinion in In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007) (see our earlier posting on the Seagate opinion here), Magistrate Thynge recently granted summary judgment of no willful infringement. Cordance Corp. v. Amazon.com, Inc., C.A. No. 06-491-MPT, Memo. Order (D. Del. July 27, 2009). Specifically, despite plaintiff's argument that Amazon had notice of its patents based on Amazon's level of activity and knowledge in the field of 1-click technology, the Court found that this was insufficient to demonstrate an objectively high likelihood that its actions constituted infringement of a valid patent. Id. at 10-11. Instead, the Court noted that Cordance's argument relied more on the "negligence standard for willful infringement overruled by Seagate." Id. at 11. Furthermore, the fact that Amazon moved for summary judgment of invalidity and non-infringement of the patents-in-suit demonstrated a "good faith belief in its defenses to Cordance's claims" and Cordance's own brief in support of its own motion for summary judgment states that the case "raises hotly contested issues of fact..." which are "likely to turn ultimately on conflicting expert testimony." Id. at 12. The Court therefore found that Cordance did not present enough evidence under the Seagate standard to demonstrate that Amazon acted despiste an objectively high likelihood that its acts constituted infringement, and granted Amazon's motion for summary judgment of no willful infringement. Id.

Cordance Corp. v. Amazon.com, Inc., C.A. No. 06-491-MPT, Memo. Order (D. Del. July 27, 2009).

In a patent infringement action, Magistrate Judge Mary Pat Thynge recently granted defendant SPI Pharma, Inc.’s (“SPI”) motion to amend their answer despite the deadline for amending pleadings having passed in May 2007. Roquette Frère v. SPI Pharma, Inc., C.A. No. 06-540-GMS (D. Del. May 21, 2009). SPI’s motion was hotly contested by plaintiff Roquette Frères (“Roquette”), despite Roquette amending their complaint twice (once after the deadline to do so had passed). Id. at 1. SPI initially responded to Roquette’s second amended complaint on July 13, 2007, but filed the present motion to amend on December 31, 2007, in order to include a defense and counterclaim based on inequitable conduct. Id. at 2. After deposing the inventors of the patent-in-issue in November 2007, testimony was elicited allegedly supporting a claim that “Roquette and/or its agents or representatives knowingly and intentionally misled the PTO regarding the content of prior art described in the . . . patent specification, and withheld material information.” Id. at 2-3. Magistrate Judge Thynge noted that “prejudice to the non-moving party is the ‘touchstone for the denial of an amendment.’” Id. at 12. However, Roquette claimed they would be prejudiced only because they “would have to address a new issue and rework its case, thereby incurring additional costs.” Id. When disregarding Roquette’s argument, Magistrate Judge Thynge stated that the inventors’ knowledge regarding the patent specification and their representations to the PTO were “within the control of Roquette.” Id. Moreover, SPI’s motion to amend was filed four months before the close of discovery and before a trial had been scheduled. Finally, Roquette failed to present evidence that SPI brought the motion in bad faith or that amendment would be futile. Roquette focused only on their disagreement with the merits of the inequitable conduct allegations, while failing to point to deliberate conduct or SPI’s failure to allege facts that could support a finding in its favor. Id. Roquette Frère v. SPI Pharma, Inc., C.A. No. 06-540-GMS (D. Del. May 21, 2009)

Over a year after filing a lawsuit alleging infringement of five patents, the plaintiffs decided to voluntarily move to dismiss the case against the defendant with prejudice and proceed against a group of different defendants. After the Court granted that motion the defendant filed a motion to declare the case exceptional pursuant to 35 U.S.C. Section 285 and award defendant its fees and expenses. Parker-Hannifin Corp. v. Seiren Co., C.A. No. 07-104-MPT, Memorandum Opinion (D. Del. Mar. 31, 2009). Magistrate Judge Mary Pat Thynge, citing Judge Farnan’s recent decision in Prism Techs. LLC v. VeriSign, Inc., found that plaintiffs’ analysis of defendant’s product, using an electron micrograph to identify coverage by its patents was a sufficient pre-filing investigation. “Though further investigation could have occurred before filing suit, [plaintiffs’] investigation suggests that its action was neither vexatious or unjustified, and that its assessment of infringement was not manifestly unreasonable.” Id. at 7. Furthermore, seeking dismissal about one year after receiving discovery from defendant was not reckless because “[p]arties should be able to terminate litigation when costs make trial an unattractive remedy or when other litigation strategies develop.” Id. at 8.

Parker-Hannifin Corp. v. Seiren Co., C.A. No. 07-104-MPT, Memorandum Opinion (D. Del. Mar. 31, 2009).

In managing litigation, trial judges are often called on to enforce the structure of the case while simultaneously preserving the fluidity of the parties' claims. These competing goals take form in the rules governing scheduling orders and the amendment of pleadings, respectively. In a recent decision, Magistrate Judge Mary Pat Thynge resolved a meritorious, but untimely, motion to amend by reference to these competing policies.

Because the information forming the new inequitable-conduct allegations did not fully come to light until after several depositions, the Court granted the motion to amend:

"[T]he court finds that Amazon is pleading new legal theories based on additional information which was recently provided and confirmed through the depositions of the inventors. Although Cordance maintains that Amazon possessed the documents which form the basis of its inequitable conduct pleadings for more than a year, in light of the 'pleading with particularity requirement of Rule 9(b),' it was appropriate for Amazon to confirm the factual allegations through discovery."

By referencing the timing of the discovery, and the concomitant need for particularized detail in this instance, the Court adopted the fluidity goal at the expense of its structural counterpart. In making this determination, however, the Court did not lose sight of the institutional value of adhering to scheduling orders: the inequitable-conduct defense will likely be tried apart from the other issues in the case.

Cordance Corp. v. Amazon.com Inc., C.A. No. 06-497-MPT (D. Del. Feb. 18, 2009) (Thynge, M.J.).

Magistrate Judge Mary Pat Thynge recently issued a Markman opinion in the matter Cordance Corp. v. Amazon.com, Inc., C.A. No. 06-491-MPT, Memo. Order (D. Del. Dec. 5, 2008). The construed claims include:

(1) "metadata"
(2) "providing customer data storing information for a customer;" "providing information provider data storing information for an information provider"
(3) "metadata associating said customer data with said transaction"; "metadata associating said information with said transaction"
(4) "processing said metadata associating said customer data so as to complete the purchase transaction"
(5) "information provider"
(6) "information consumer"
(7) "control structure"
(8) "processing of said control structure"
(9) "feedback information"
(10) "processing said metadata to execute instructions external to said control structure"
(11) "storage menas for storing"
(12) "association means for creating metadata associating portions of said information and defining a control structure for processing at least at said consumer memory to associate with said metadata processes for controlling the communication of said information, said metadata including data exchange metadata associating a process for controlling the transfer of feedback information, said feedback information including at least a portion of said consumer information, to said provider"
(13) "transfer means for transferring said information, including said metadata defining said control structure from said provider memory to said consumer memory"
(14) "feedback transfer means for transferring said feedback information from said consumer memory to said provider memory"
(15) "processing means for executing instructions external to said control structure to perform said processes to control communication of said information"
(16) "directly modify the user's own respective personal data record within the database"
(17) "virtual personal address book"
(18) "directly view the data records."

Cordance Corp. v. Amazon.com, Inc., C.A. No. 06-491-MPT, Memo. Order (D. Del. Dec. 5, 2008)

In the case of Parker-Hannifin Corporation v. Zippertubing (Japan), Ltd., Magistrate Thynge construed the following claim terms found in five patents related to flame-retardant, electrically conductive materials:

(1) "which is not V-0 rated"
(2) "exterior surface"
(3) "thickness dimension"
(4) "coating at least a portion of the interior surface"
(5) "being/is effective to afford said gasket a flame class rating of V-0"
(6) "penetrating...such that the exterior surface remains electrically conductive"
(7) "between about 30-50% by weight"
(8) "at least about 30% by weight"
(9) "at least about 50% by dry weight"

Despite defendant's arguments that the claim terms describing the weights should be held indefinite, effectively arguing that summary judgment on indefininteness was appropriate at this stage of the litigation, the Court adopted the proposed construction proffered by the plaintiff, but implied that the defendant may be able to raise their indefiniteness argument again during the summary judgment phase of the case. Id.

Parker-Hannifin Corp. v. Zippertubing (Japan), Ltd., C.A. No. 06-751-MPT, Memo. Order (D. Del. Nov. 18, 2008).

What are reasonable attorneys’ fees when a court finds a plaintiff pursued litigation in bad faith as to 29 of 33 claims in a total of 3 patents? That was the question raised by the parties and addressed by Magistrate Judge Thynge in a recent opinion, Microstrategy Inc. v. Crystal Decisions, Inc. d/b/a Business Objects Americas, C.A. No. 03-1124-MPT, Memo. Order (D. Del. Nov. 19, 2008). After the Court awarded defendant’s motion for fees and expenses pursuant to 35 U.S.C. 285, (see earlier blog posting here), the defendant submitted its request for approximately $2 million in fees and expenses and additional fees incurred in submitting the original motion for fees and the submission supporting their fee request. Id. at 3. Plaintiff argued that the only fees that should be awarded are those where the invoices detail that the time was spent specifically on defending the 29 claims that were found invalid and not infringed, and that the block-billed invoices that defendant submitted were therefore inadequate. Id. at 4.

The Court found that “[a]lthough many of the entries do not address a specific patent, they describe conduct and tasks consistent with and necessary in patent litigation.” Id. at 9. Following the District of Maryland’s opinion in Beckman Instruments Inc. v. LKB Produkter AB, 17 U.S.P.Q.2d 1190 (D. Md. 1990), aff’d, 930 F.2d 37 (Fed. Cir. 1991), Magistrate Judge Thynge further held that it was not necessary for the defendant or the Court to determine “precisely what fees and expenses are solely attributable to defending those patent claims made in bad faith.” Id. The legal work performed must be related in some way to the bad faith not that it flow solely from the bad faith or misconduct. Id. at 10.

Therefore, defendant was entitled to $2,249,387.22 in fees and costs less the overhead costs charged. Id. at 11. The Court awarded an additional $138,399.02 for fees and costs related to the fee application and related briefing. Id. at 13.

As a procedural note, this case was a fee petition after an award of summary judgment and not after a full trial on the merits.

Microstrategy Inc. v. Crystal Decisions, Inc. d/b/a Business Objects Americas, C.A. No. 03-1124-MPT, Memo. Order (D. Del. Nov. 19, 2008).

A plaintiff chooses to file three separate actions in the same district against three separate alleged infringers. The plaintiff asserts the same patents in all three actions. A defendant in one of the matters adds an inequitable conduct defense against the plaintiff. After the cut-off date for amendments to the pleadings, the defendant in another matter moves to amend its answer to add the same claims of inequitable conduct that were pled by the other defendant in the separate pending matter. What is the result? Should the defendant be able to add the same defense asserted by another defendant in a different action but against the same plaintiff? Magistrate Judge Thynge recently answered that question, yes. Parker-Hannifin Corporation v. Zippertubing (Japan), Ltd., Memo. Order (D. Del. Sept. 24, 2008). Under Rule 15(a), the plaintiff could not argue prejudice since they had notice of the allegations from the companion case and the case was early in the discovery process. Id. at 5 n.8.

The plaintiff, in arguing against allowing the amendment, did not in fact argue prejudice, but instead argued that defendant’s one theory of inequitable conduct “is not necessary to practice the patents-in-suit or for the best mode” and that the other theory rests on a patent that is not prior art or material to other patentability requirements. Id. at 3. The Court will not weigh evidence when deciding a motion to amend and therefore the plaintiff’s reliance on factual contentions in opposing the amendment were unsuccessful. Id. at 7. Furthermore, in order to satisfy Federal Rule of Civil Procedure 9(b), the defendant need only allege the relevant material information and the acts of alleged fraud to “permit responsive pleading” and defendant disclosed “at least that much in its twenty-eight paragraph amendment.” Id. at 7-8.

Parker-Hannifin Corporation v. Zippertubing (Japan), Ltd., Memo. Order (D. Del. Sept. 24, 2008).

CIF Licensing brought a lawsuit for patent infringement in the Eastern District of Texas against various defendants. One defendant, Remy International, moved to dismiss for lack of personal jurisdiction arguing that it was only a corporate "shell" and that its subsidiaries were the proper defendants. Subsequently, the Remy subsidiaries filed a declaratory judgment action in this District. Following that complaint, CIF amended its original complaint in Texas to join the proper subsidiary defendants and the Texas court stayed the action pending resolution of the "first-filed" issue by the District of Delaware. Remy Inc. v. CIF Licensing, LLC, C.A. No. 06-785-GMS/MPT, Memo. Order, at 2 (D. Del. June 9, 2008). Of note is the fact that the Delaware action had named potential suppliers and indemnitors as third-party defendants or defendants (who were not named in the Texas action).

Magistrate Thynge found that the relation back doctrine allowed CIF to properly add the subsidiary defendants to its Texas complaint and the Texas case was in fact, the first-filed. The court was not persuaded to depart from the first-filed rule simply because the indemnity claims were only found in the Delaware lawsuit, particularly where in a district such as this, great weight is given to plaintiff's choice of forum. Id. at 8-9.

For a copy of the opinion, see here.

Last year, the Federal Circuit affirmed former District of Delaware Judge Kent A. Jordan's decision in Microstrategy Inc. v. Crystal Decisions, Inc. d/b/a Business Objects Americas which granted partial summary judgment in favor of Business Objects America on invalidity of two of Microstrategy's patents and summary judgment as to non-infringement of a third Microstrategy patent. (See earlier Delaware IP Law Blog posting, June 27, 2007.) Business Objects subsequently filed a motion for its attorney fees and expenses pursuant to 35 U.S.C. Section 285 and the Court granted this motion, in part, on March 25, 2008. Microstrategy Inc. v. Crystal Decisions, Inc. d/b/a Business Objects Americas, C.A. No. 03-1124-MPT, Memo. Op. (D. Del. March 25, 2008). Magistrate Thynge stressed over and over again in her opinion that Microstrategy's "failure to produce" any evidence contrary to Business Objects' evidence as to anticipation on one patent-in-suit was critical to the finding of fees. Id. at 6-7. The Court stated that Microstrategy was "clearly aware" of the prior art and the fact that it would make any claim of infringement unjustified and yet "failed to reassess the merit of its claims". Id. at 8. These two things together established the "manifestly unreasonable" conduct necessary for a finding of fees. Id. at 8.

As to a second patent that was asserted in the litigation, the Magistrate found that Microstrategy presented a "reasonable basis" to continue litigating certain claims but their continued pursuit of the remaining asserted claims was in bad faith. Id. at 10.

Finally, on the third patent-in-suit, Business Objects argued that Microstrategy had no reasonable basis to allege infringement of certain claims of that patent. Id. at 11. After Business Objects directed Microstrategy to an error in its expert report, the expert submitted a supplemental report with a new theory of infringement. This new theory contradicted its representations to the PTO during reexamination of the patent-in-suit. Id. at 11-12. The Court found that this new theory, in addition to Microstrategy's failure to provide an explanation of its expert's mistake and the timing of its reassessment of the claims, "calls into questions its motives and whether it, in fact, continued this action in good faith." Id. at 12. Such conduct ultimately supported a finding of bad faith.

Based on the facts, the Court found that by March 2005, it was unreasonable for Microstrategy to continue its pursuit of certain claims and therefore the Court limited Business Objects to its fees and expenses after that date. Id. at 12. Despite Microstrategy's arguments that Business Objects failed to show any "gross injustice," Magistrate Thynge stated that "forcing an alleged infringer to defend against apparent baseless claims" was the "gross injustice." Id. at 13.

Of note for future attorneys' fee applications in the District of Delaware, Magistrate Thynge found the fees reasonable based on the following evidence: billing rate and amount of hours charged by each attorney, the level of experience of each attorney, description of each attorney's activities during a period, expense statements and a comparative analysis of its rates and the AIPLA cost survey (see AIPLA website for more information). Id.

For a copy of the opinion click here.

Judicial analysis of inequitable conduct often appears at an advanced stage of litigation: at summary judgment, in post-trial briefing, or, increasingly, following an auxiliary phase of trial. But how do inequitable conduct claims fair at the opposite end of the litigation spectrum, at the pleading stage? From a litigator's perspective, what does it take to avoid dismissal on sufficiency-of-the-pleadings grounds?

District of Delaware Magistrate Judge Mary Pat Thynge recently addressed this issue in the context of a motion to amend. Holding that FRCP 9's particularity requirement does not extend to allegations of how the withheld information is material to the prosecution of the patent-in-suit, the Court reaffirmed the contours of Rule 9 in Delaware:

In this jurisdiction, the standard for Rule 9(b), in light of Rule 8, is not as severe or as specific as [plaintiff] suggests . . . . [T]o meet the requirements of Rule 9(b), [defendant] need only disclose the relevant material information and the acts of the alleged fraud to apprise [plaintiff] of what is being alleged in a manner sufficient to permit responsive pleadings.

In other words, the particularity rule captures only those facts indispensable to eventually demonstrating materiality and deliberate intent. With this data in the litigation, and with the parties on notice of the claim's boundaries, the Court is equipped to conduct the later-stage analysis of whether materiality and intent have actually been established.

Venetec Int'l Inc. v. Nexus Medical LLC, C.A. No. 07-057-MPT (D. Del. March 28, 2008) (Thynge, M.J.).

On February 1, 2008, Mary Pat Thynge was reappointed as a full-time magistrate judge for the District Court of the District of Delaware. The order states that her new eight-year term will begin on June 17. Until last August, Magistrate Thynge was the district's only magistrate and many patent litigators will know her for her reputation in successfully mediating patent cases. Last August, she was joined by Magistrate Leonard P. Stark

See a copy of the order here: Magistrate Thynge Reappointment Order

Of note, our colleague, Monté T. Squire of Young Conaway Stargatt & Taylor was appointed to the Merit Selection Panel which was charged with reviewing the Magistrate's prior service, receiving and reviewing comments from the Bar and public and making a recommendation to the Court regarding the Magistrate's reappointment.

For a copy of Mr. Squire's biography

In the case Cordance Corp. v. Amazon.com, Inc., C.A. No. 06-491-MPT, Memo. Order (D. Del. January 22, 2008), Cordance Corp. has alleged that Amazon's trademarked "1-click" technology infringes its patent covering i-name technology. Amazon.com filed a declaratory judgment counterclaim alleging that Cordance's promotion of the i-name services infringes its patent covering software realted to personal address books. Cordance moved to dismiss this counterclaim and the Court subsequently denied the motion. See also posting on 12/04/07: Another "Case or Controversy" Decision Post- "MedImmune". This opinion addresses Cordance's motion for reconsideration and motion for leave to file a reply memorandum including a motion for Fed. R. Civ. P. 11(c) sanctions. Id. at 1.

The Court found that unlike the cases where there is a covenant not to sue and the patent holder abandons the infringement allegations, Amazon is not abandoning its claims here. Furthermore, Cordance has not stopped or agreed to stop all allegedly infringing activities. To divest the Court of declaratory judgment jurisdiction, the Court implies that the cessation of all potentially infringing activities either direct or indirect must be shown. Id. at 5.

Magistrate Judge Thynge further noted that Cordance's attempts in its motion to engage in the court in a facutal and legal analysis of Amazon's counterclaims would not succeed and that her analysis would stick to the issues at hand. Id. at 5.

On December 21, 2007, Magistrate Thynge granted summary judgment to Reexam Beverage Co. finding that two claims of US Patent No. 5,697,242 were infringed. Crown Packaging Tech. Inc. v. Reexam Beverage Can Co., C.A. No. 05-608-MPT, Memo. Order (D. Del. Dec. 21, 2007). The patent-at-issue involved methods for "reforming the bottom of a can body or can base" to make the can stronger while using less metal. Id. at 3. The Court found that Crown's technical drawings, physical can samples and testimony of its witnesses demonstrated infringement of two claims of the patent-in-suit.

Commissariat a l'Energie Atomique v. Samsung Electronics Co., et al., C.A. No. 03-484-MPT (D. Del. Oct. 31 and Nov. 2, 2007).

On October 31st and November 2nd, Magistrate Judge Thynge issued a series of four opinions in the above case. This case is a patent dispute involving the design and manufacture of liquid crystal displays. In particular, the claims relate to increasing the viewing angle of LCD display panels (like the one on your holiday shopping list). I will address each opinion in turn.

The first opinion denied in part and granted in part Samsung's motion for summary judgment that claims of the '412 patent at issue are anticipated by a European patent publication. Before comparing the claims at issue and the disclosure of the European reference, the Court noted that 'the fact that the examiner may have considered EP '775 [the European publication] during prosecution is not dispositive of Samsung's motion.' Op. at 7. The Court then noted that 'whether a reference 'teaches away' from the invention is inapplicable to an anticipation analysis.' Op. at 9 (citing 150 F.3d 1354, 1361). Thus, the fact that the European reference disparages the invention after disclosing it is not dispositive. Finally, the Court compares the claims at issue to the European reference and concludes that two of the three claims are anticipated.

The second opinion dealt with Samsung's motion for summary judgment that the '028 patent failed to disclose the best mode of performing the invention. Samsung argued that a particular polarizer, a model by Sanritz, was known by the inventors to be the best polarizer to carry out their invention, and the inventors concealed this polarizer by not disclosing it in the patent application such that a person of ordinary skill in the art would not be enabled to practice the invention. After determining that the relevant date of inquiry concerning the inventor's subjective belief as to the best mode of carrying out the invention is the earliest priority date claimed in the patent, the Court found Samsung had presented clear and convincing evidence that the Sanritz polarizer was the best mode of carrying out part of the claimed means and that the inventors had indeed concealed the best mode by not disclosing it in the application. Interestingly, the Court held that the trade name of the polarizer, Sanritz, 'was necessary for a skilled artisan to practice the best mode of the claimed invention' and, therefore, the trade name should have been disclosed. Op. at 8. Thus, the Court invalidated the '028 patent.

The third opinion dealt with the parties' cross motions for summary judgment of infringement and noninfringement of the claims remaining at issue after the decisions discussed above, claims 3-5 and 12. As to claims 3-5 of the '412 patent, both parties lost their summary judgment motions on literal infringement. As to infringement under the doctrine of equivalents, however, the Court found that CEA's conclusory statements were insufficient as a matter of law. Thus, the Court granted Samsung's motion for summary judgment of noninfringement as to infringement under the DOE. The Court further bolstered this decision in the alternative by holding that applying the DOE to the 'uniaxial medium' claim term as requested by CEA would vitiate the term under the all elements rule. Both parties lost their summary judgment motions as to claim 12 of the '412 patent. Finally, the Court addressed CEA's motion for summary judgment of inducement of infringement. As to this motion, the Court held that '[a]lthough intent may be proven by circumstantial evidence, when a plaintiff introduces circumstantial evidence that allows for inferences to be drawn, it is 'up to the jury to decide whether or not to draw any inference and to consider the weight of any such evidence.' 'Op. at 18 (citing 471 F.3d 1293, 1306). Since circumstantial evidence was presented as to intent, the Court denied the summary judgment motion, allowing the issue to proceed to the jury.

The fourth and final opinion dealt with Samsung's summary judgment motion that claims 3-5 of the '412 patent were anticipated under 102(b) by a single prior art reference. The Court denied the motion because there were multiple questions of fact as to whether certain claim elements were disclosed in the reference. One practical point was noted by the Court on page 7 of the opinion: make sure to explain how the language you quote in a reference discloses the corresponding claim element in your claim chart. In this case, the Court was unwilling to guess as to how/whether the quoted language disclosed the claim element. Completing the thought for the reader is almost always preferable to leaving the reader to complete the thought for themselves.

The District Court recently held that evidence of "marketing products or services and entering into licensing agreements" is enough to support declaratory judgment jurisdiction. Cordance Corp. v. Amazon.com, Inc., C.A. No. 06-491-MPT, Memo. Order (D. Del. Nov. 20, 2007). This is true even where there is no allegedly infringing product or service currently on the market and where there was no threatened litigation or request to cease and desist. Following the Supreme Court's holding in MedImmune which rejected the requirement of "reasonable apprehension", the Court found that the counterclaim defendant's advertising and promoting of a service that was expected to be introduced, development of the architecture used by other companies to allegedly infringe the patent and receiving licensing fees related to the allegedly infringing service was enough to create a "case or controversy" sufficient for the Court to have jurisdiction. Id. at 7.

In a separate argument, the counterclaim defendant asserted that Amazon's counterclaim was vague and failed to state a claim because it did not "sufficiently identify which products allegedly infringe." Id. at 5. The Court found that Amazon did not need to identify specific products by name, "so long as they are sufficiently described in some way." Id. at 8.

Magistrate Judge Mary Pat Thynge recently broadened the Court's discovery-dispute procedure. As of October 22, all discovery matters, rather than "disputes," must follow the letter-briefing schedule set out in the Court's revised form scheduling order). As demonstrated in a recent order, requests for extensions of discovery deadlines fall within the definition of "discovery matters," and therefore must adhere to the Court's guidelines.

Roquette Freres v. SPI Pharma Inc., C.A. No. 06-540-*** (D. Del. Oct. 17, 2007) (Thynge, M.J.).

Crown Packaging Tech., Inc. v. Rexam Beverage Can Co., C.A. No. 05-608-MPT (D. Del. Oct. 5, 2007).

In this chapter of the beverage can patent dispute between the parties, Magistrate Judge Thynge denied Crown's motion for summary judgment of patent invalidity. Crown argued that certain asserted claims are invalid under § 102(g)(2) by a prior process practiced by the Ball Corporation. Rexam argued that the Ball process was not prior art because the claims at issue claim priority from a PCT application with a priority date predating the reduction to practice of the Ball process. (Still with me? If not, re-read the last sentence.) Each side's respective experts disagreed (imagine that!) over whether one of ordinary skill in the art would understand the PCT application to inherently disclose "radial movement of the reforming roller," a limitation present in the asserted claims. If the "radial movement" limitation is not found (either expressly or inherently) in the PCT application, then the patentee cannot rely on the PCT application's priority date. Due to this disagreement between the experts about whether a person of ordinary skill in the art would understand the PCT application to inherently disclose the "radial movement," the Court denied the motion for summary judgment.

In the late 1990s, a New York district court recognized the foreign "patent-agent privilege," which provides that "if a communication with a foreign patent agent involves a foreign patent application, then as a matter of comity, the law of that foreign country is considered regarding whether that law provides a privilege comparable to the attorney/client privilege." Nearly ten years later, the District of Delaware faced a similar question: whether, under French law, the patent-agent privilege is broad enough to extend to a special category of French patent agents.

Answering no, Magistrate Judge Thynge settled one of the rarer privilege disputes in this district.

In the underlying case, Defendant Samsung sought communications between Plaintiff CEA and the French patent agents that assisted CEA in prosecuting several French patents related to the patents-in-suit. Raising the patent-agent privilege, CEA opposed, claiming that its patent agents were entitled to assert privilege under a French professional-association regulation. When Samsung countered that a 2004 statute enacted by the French Parliament mooted the 2002 regulation, and therefore removed the agents' ability to assert privilege, the Court faced the task of engaging in French statutory interpretation. Ultimately, the Court sided with Samsung: "CEA's argument requires the court read into the 2004 statute an exception, the effect of which would be to modify the 2004 statute by the prior decree."

The result? The patent-agent privilege does not apply in this context and the French documents must be produced. The question of whether the foreign patent-agent privilege can be successfully asserted in this district must therefore wait another day.

Commissariat A L'Energie Atomique v. Samsung, C.A. No. 03-484-MPT (D. Del. Oct. 16, 2007) (Thynge, M.J.).

Crown Packaging Tech., Inc. v. Rexam Beverage Can Co., C.A. No. 05-608-MPT (D. Del. Aug. 28, 2007).

Crown moved the Court to reconsider its previous decision not to bifurcate plaintiff's infringement claims from defendant's infringement claims. In support of its motion, Crown cited two not-previously-cited cases from this district where the Court had bifurcated plaintiff's and defendant's claims of infringement. The Court reminded Crown that it "should have brought those cases to the Court's attention during the briefing of its motion to bifurcate" because "it is not proper on a motion for reargument for a party to digest the court's analysis of the cases cited during briefing and then seek to find other cases (which could have been previously cited) to present to the court…" Op. at 4. The Court also noted that Crown was attempting to shift its arguments – Crown had originally argued for complete bifurcation of the plaintiff's and defendant's cases, while in its motion for reconsideration Crown argued for a two-phase trial with one jury (addressing the Court's concerns about impaneling two juries and the extra time needed for two separate trials). Op. at 5.

Takeaway: In arguing for bifurcation, it may help to make a showing that the Court can accomplish the bifurcated proceedings in the time originally allocated for the combined proceedings.

Is a single jury equipped to consider competing expert testimony on reasonable royalty damages? Thankfully, a District of Delaware judge has answered in the affirmative. Much has been made in recent years about the American jury's ability to comprehend, digest, and assess the evidence in complex civil litigation, most notably in patent cases. By denying a plaintiff's motion to bifurcate, Magistrate Thynge has implicitly reaffirmed the vitality of the lay factfinder's role in patent litigation.

The Court rejected, among other reasons, plaintiff's claims of "jury incompetence" on the issue of reasonable royalty damages. By doing so, the Court noted plaintiff's curious argument: "Crown offer[ed] that its experts have calculated a different royalty rate than [defendant's experts], and therefore, Crown would be prejudiced by the introduction of [defendant's] evidence on that issue." Declining to accept plaintiff's protestations that one jury could not undertake such a "monumental task," the Court denied the request for bifurcation.

In a world awash with proposals for specialized patent courts and other devices foreign to the common law, it is reassuring to know that the institution of the jury, a staple of all civil litigation, no matter how complex, retains the confidence of the judicial branch.

Crown Packaging Tech. Inc. v. Rexam Beverage Can Co., C.A. No. 05-608-MPT (July 24, 2007) (Thynge, M.J.).

In the recent Time Warner Cable, Inc. v. GPNE Corp. decision by the District of Delaware, Magistrate Judge Thynge found that Third Circuit law does not "specifically require the exact identity of the parties" when applying the first-to-file rule. C.A. No. 07-67-MPT, Memorandum Op. (D. Del. July 20, 2007). In Time Warner, the defendant, GPNE, had originally filed a patent infringement case in the Eastern District of Texas against Time Warner, Inc. and various other parties. Two days later, Time Warner Cable, Inc. filed a declaratory judgment action in the District of Delaware of non-infringement and invalidity of the patent that was asserted in the Texas litigation. The basis for declaratory judgment jurisdiction as alleged by Time Warner Cable, Inc. was that GPNE intended to include it in the Texas litigation as a defendant and therefore that would impact its business activities. Time Warner Cable, Inc. and Time Warner, Inc. are two separate entities (with Time Warner, Inc. owning 84% of Time Warner Cable, Inc.). Id. at 4. Subsequently, GPNE did amend its complaint in the Texas litigation to include Time Warner Cable as a defendant and moved to transfer the Delaware case to Texas.

The Court found that chronologically, GPNE was the "first-to-file" and because the Delaware case involves the same facts and the same patent the first-to-file rule will apply, despite the fact that Time Warner Cable was not originally a party to that first-filed action. Therefore, the Delaware case was dismissed and GPNE's motion to transfer or stay was denied as moot.

In dicta, the Court made some interesting notes on forum shopping. Time Warner Cable had alleged that GPNE's filing of the Texas action was forum shopping because it is a favorable jurisdiction for plaintiffs. The Court found no evidence that GPNE chose to litigate in Texas in "bad faith". Id. at 10. The Court did, however, note that Time Warner Cable, Inc.'s decision to file suit in Delaware could be considered an example of forum shopping because it was filed in anticipation of them being added as a defendant to the Texas litigation.

Once again it just proves the old adage…timing is everything…

Magistrate Judge Thynge issued an interesting decision last week that detailed the intersection of patent litigation and the arbitration of commercial disputes. Plaintiff Digene brought an infringement action against one defendant and later added inducement and tortious interference claims against another, Co-Defendant Beckman. The Court stayed the patent case and ordered "all" of Digene's claims against Beckman to arbitration. Following the arbitrator's favorable interpretation of a prior licensing agreement between the parties, Beckman sought to dismiss the inducement and interference claims on res judicata grounds.

The Court agreed that Digene had the opportunity to litigate its commercial and inducement claims before the arbitrator: "In light of Beckman's license under the [agreements], whether it induced infringement . . . by its relationship with Ventana was dependent upon the interpretation of the [agreements between the parties]. Further, because of Beckman's rights under the [agreements], whether it could tortiously interfere with Digene's potential business opportunities also hinged upon the same agreements . . . ."

As a result, Digene's attempts to continue the litigation following the arbitrator's decision could not proceed: "[Digene's claims] have already been evaluated twice by two different forums between the same parties and Digene, in essence, is asking for a third opportunity."

The Court's rationale highlights the importance of avoiding, when dealing with multiple claims of varying subject matter, the prospect of this type of arbitration estoppel.

Digene v. Ventana Medical Systems, C.A. No. 01-752-MPT (D. Del. June 12, 2007) (Thynge, M.J.).

On May 17, 2007, Judge Thynge issued a claim construction opinion in Crown Packaging Technology, Inc. and Crown Crok & Seal USA, Inc. v. Rexam Beverage Can Co. C.A. No. 05-608-MPT, Memorandum Order (D. Del. May 17, 2007). Consistent with Phillips v. AWH Corp, 415 F.3d 1303 (Fed. Cir. 2005), the court construed various claim terms set forth in both parties' patents related to beverage can technology.

A frequent issue that arises in patent litigation is how to secure the testimony of inventors who are no longer employed by the plaintiff (or defendant in a declaratory judgment action). This issue becomes even more complicated when the inventors do not reside in the United States. The language of any assignment agreement is often outcome-determinative, as was the case in Amgen, Inc., et al. v. Ariad Pharmaceuticals, Inc., et al. C.A. No. 06-259, Memorandum Order (D. Del. May 14, 2007) (Thynge, J.).

Amgen in its declaratory judgment action against Ariad moved to compel the deposition of 3 (of 13 total) inventors on the patent-in-suit whom Ariad refused to produce. These three inventors were all located overseas and were no longer employed by the defendants, however, all three executed assignment agreements. The assignment provided, in relevant part, that they would: "…perform any other lawful acts which may be deemed necessary to secure fully the aforesaid invention to said ASSIGNEE…including the execution of applications for patents in foreign countries, and the execution of substitution, reissue, divisional or continuation applications and preliminary or other statements and the giving of testimony in any interference or other proceeding in which said invention or any application or patent directed thereto may be involved." Id. at 2.

Ariad opposed the deposition request because none of the inventors were ever employed by or affiliated with them, there were ten other inventors that were available for deposition and the language of the assignment was only related to perfecting title of the invention and did not require them to assist in infringement or declaratory judgment actions. Id. at 3.

The Court found that unlike the language in the assignment found in Minebea Co., LTD, et al. v. Papst, et al. , 370 F. Supp. 2d 302, 308 (D.D.C. 2005) ("to render such assistance…as may be necessary to perfect title to the…Patent Rights."), there was no mention in the current assignment of perfecting title and the assignment was further not limited to assisting in prosecuting patent applications. This assignment agreement specifically required the inventors to "secure fully the invention" and testify in any legal proceedings involving the invention or patent for that invention and therefore the Court required Ariad to produce the three inventors in the U.S. for deposition at Amgen's cost. Id. at 5, 6.

Ariad's argument that ten other inventors on the patent-in-suit were available for deposition also did not persuade the Court otherwise. The Court found that each inventor's contribution to this patent that "addresses complicated bioscience" is relevant. Furthermore, the Court noted, ARIAD had produced two of these inventors in other litigation surrounding the same patent. Id. at 6.

A note to practitioners: be mindful of any time elapsing before filing a motion for preliminary injunction as it could be a reason for denying the relief. On May 9, 2007, Magistrate Judge Thynge issued an opinion in the case of Digene Corporation v. Ventana Medical Systems, Inc. and Beckman Coulter, Inc. denying plaintiff's request for preliminary injunctive relief for lack of showing irreparable harm or likelihood of success on the merits. C.A. No. 01-752 (D. Del. May 9, 2007) (Thynge, J.). Digene sought to enjoin defendant Ventana from making, using, selling or offering to sell reagents that contain HPV35, a human papillomavirus. This motion was filed 58 months from the date the initial complaint was filed and 30 months after, if one were to subtract the stay that was in place while Digene and Beckman Coulter engaged in arbitration proceedings before the International Centre for Dispute Resolution. The Court noted that "delay in seeking a preliminary injunction is a significant factor bearing on the need for it." Id. at 15. There was no "plausible explanation" in the record as to why Digene waited such a long period of time to file its motion. Id. In fact, Digene had filed a motion in 2003 seeking a more limited injunction to prevent Ventana from entering into a deal with third parties yet did not address any of the irreparable harm in that motion that it now claims to be suffering from. Id. Delay, the Court stated, "for a significant period of time before seeking a preliminary injunction intimates that the status quo is not causing irreparable harm." Id. at 16.

The Court further found that Digene's argument that Ventana was causing a possible loss of customer relations or effect on its market share was only "speculation" since the actual evidence showed continued "substantial growth" by Digene in the relevant market.

The Court earlier in the opinion found that Digene had also not established a likelihood of success on the merits.

The question remains: how long is too long - but the better practice…better safe than sorry. So file those motions as early as possible to avoid a finding of delay.

One party to a settlement agreement lists the document on a privilege log in subsequent litigation between the signatories and a third-party plaintiff. The other party to the settlement, a co-defendant in the subsequent litigation, fails to log the agreement. Plaintiff realizes the discrepancy and argues that any privilege that may have attached to the document has been waived.

What is the answer? Read pages 5-6 of <%media(20070420-Sedona.pdf|Block Drug Co. v. Sedona Labs. Inc.)%>, C.A. No. 06-350-*** (D. Del. April 19, 2007) (Thynge, M.J.) to find out.

In <%media(20070314-Digene Ventana 01-752-MPT - 3-6-07.pdf|Digene Corp. v. Ventana Medical Systems, Inc. and Beckman Coulter, Inc.)%>, Magistrate Thynge found that federal patent claims preempt any separate claim alleging conspiracy to infringe a patent. C.A. No. 01-752 (D. Del. Mar. 6, 2007) (Thynge, J.).

Ventana moved to dismiss Digene's count for civil conspiracy which alleged:

65. The foregoing allegations of this amended complaint
are incorporated by reference.
66. Ventana and Beckman have combined and conspired
for an unlawful purpose, i.e., patent infringement and inducement to infringe the '332 and '331 patents
and to evade their discovery obligations, with the intent to injure Digene.
67. As a direct and proximate result of the civil
conspiracy, Digene has been injured by Ventana and
Beckman in an amount to be proven at trial.

(D.I. 174, Paras. 65-67). Digene separately alleged a count for tortious interference with Digene's business opportunities. The Court chose not to rely on two non-precedential cases cited by the Plaintiff that they argued found that the Federal Circuit has allowed separate claims for civil conspiracy to commit patent infringement. Instead, the Court relied on the Federal Circuit's decision in Rodime PLC v. Seagate Tech., Inc., 174 F.3d 1294 (Fed. Cir. 1999) which held that patent law claims will not preempt other state law causes of action if they "include additional elements not found in the federal patent law cause of action and if they are not an impermissible attempt to offer patent-like protection to subject matter addressed by federal law." Id. at 10. The Court also found persuasive various other district court cases that found that although the conspiracy issue may be relevant to a damages claim, it is not a separate ground for recovery. Id. at 10-11. Digene's claim for civil conspiracy did not contain any additional elements outside their cause of action for patent infringement and therefore the court found that the federal patent laws preempt any such claim. Id. at 12. As a side note, the Court found the fact that the Plaintiff's incorporated by reference all earlier allegations in their Complaint, including the claim for tortious interference with business opportunity, was a "shotgun" attempt to bootstrap its allegations regarding tortious interference into its civil conspiracy count. Id. at 7n.36. Furthermore, their allegation that Defendants' conspired to evade their discovery obligations was also dismissed because "the Federal Rules of Civil Procedure do not create a private cause of action." Id. at 14.

Note to plaintiffs out there: do not rely on incorporation by reference to get prior allegations into a specific count and know that your separate claim for civil conspiracy of patent infringement will not stand up in Delaware without any other additional grounds outside those included in the federal patent laws.

This was the question before Magistrate Judge Thynge in Inline's Motion for Summary Judgment that the defendants' conduct is an infringing "use" as defined by the statute. <%media(20070202-Inline AOL 02-272 2-1-07.pdf|Inline Connection Corp. v. AOL Time Warner Inc.)%>, C.A. Nos. 02-272, 02-477, Memo. Order (D. Del. Feb. 1, 2007) (Thynge, M.J.). The defendants argued that because they do not provide all the components of the claimed system they do not "use" the invention and therefore cannot infringe the patent-at-issue. The Court found that use only requires that the infringer: excercise control over the system and obtain beneficial use of the system. Id. at 2. Here the defendants provide hardware, instructions and customer support which constitute use under the statute. Id. at 4. "The fact that they do not own all the component parts of the system does not matter." Id. Therefore, to directly infringe a claim for a system, a party does not need to directly use each component of that system.

In a follow-up opinion in the Inline-AOL Litigation, Magistrate Judge Thynge has held that an expert's enablement analysis that concerns only the accused infringing product must be excluded as unreliable. AOL's invalidity expert analyzed the accused ADSL system (an end-to-end digital transmission network), rather than the claimed invention, which encompasses a larger transmission system. Responding to Inline's motion to exclude, AOL argued that the expert applied an appropriate methodology to its enablement inquiry, since the narrower ADSL system fell within the full scope of the broader claims in issue.

The Court rejected this assertion, noting that rather than being an argument of "semantics," as AOL countered, Inline properly identified the expert's faulty analysis:

"At no time did [the expert] evaluate whether the patents would enable one of skill in the art to make or use the claimed invention without undue experimentation." (slip op. at 9) (emphasis in original)

By failing to consider the claimed invention, the expert's opinion on enablement was unreliable as a matter of law and therefore inadmissible.

<%media(20070130-Inline - Enablement.pdf|Inline Connection Corp. v. AOL Time Warner Inc., C.A. No. 02-272-MPT (D. Del. Jan. 29, 2007) (Thynge, M.J.).)%>

When calculating reasonable-royalty damages, the "hypothetical license negotiation" assumes prominence in the factfinder's decisionmaking process. But what happens when a party to an infringement action seeks to introduce evidence of real negotiations to prove a reasonable royalty? According to Magistrate Judge Thynge, when those failed talks are part of settlement discussions, the numbers are inadmissible.

The Court reaffirmed the vitality of FRE 408 in patent cases by holding that the policy of encouraging "freely negotiated" settlements outweighs the obvious probative value that licensing negotiations have on a damages calculation:

"[D]efendants' argument for admission as providing a 'reality check' is directly contrary to FRE 408[,] which bars evidence when it is offered to prove the validity, invalidity or amount of a disputed claim."

According to the Court, the only significance of the data was its "effect to validate [the party's] assessment of the amount in dispute" - exactly what FRE 408 prohibits.

Interestingly, the Court implied that a potential exception exists: where an expert incorporates the underlying settlement data into his or her damages analysis, the rule may no longer apply.

<%media(20070127-Inline.pdf|Inline Connection Corp. v. AOL Time Warner Inc., C.A. No. 02-272-MPT (D. Del. Jan. 23, 2007) (Thynge, M.J.).)%>

<%media(20070117-Inline 01-16-2007.pdf|Inline Connection Corp. v. AOL Time Warner Inc., C.A. No. 02-272-MPT (D. Del. Jan. 16, 2007).)%>
Magistrate Judge Thynge granted in part and denied in part defendants' motions for partial summary judgment regarding damages and motions in limine regarding the scope of plaintiff's expert testimony on damages.

The Court denied the motion in limine to exclude expert damages calculations based in part on non-infringing product because excluding this testimony would involve the evaluation and determination of facts underlying the expert report, which the Court found improper at the summary judgment stage. Conversely, the Court excluded expert testimony that included AOL�s �Bring Your Own Access� service offering as part of the damages calculation due to the irrelevance of such testimony.

As to plaintiffs� motion for summary judgment to limit damages to infringing products only (and to exclude non-infringing sales from the analysis), the Court found it inappropriate to restrict the damages analysis at this stage. Op. at 17. Thus, the Court refused to substitute its judgment for that of the jury and denied to the motion. Under Georgia Pacific, said the Court, "calculating a reasonable royalty is not merely a function of the number of infringing systems, other elements [presumably convoyed sales of noninfringing product given the context] contribute to and influence the analysis." Id.

Last December, Magistrate Judge Mary Pat Thynge issued a decision on a patentee's continuing obligation to mark its licensed product. On a motion for reconsideration, the magistrate judge today issued a follow-up opinion reaffirming that duty:

"Inline [the patentee] made no attempt to mark, in that it never required its licensee . . . to mark tangible articles of the system. It is the burden of the patentee to show that either actual or constructive notice occurred and that it complied with the statutory requirements."

The Court also rejected Inline's assertions that the Court mistakenly concluded that the duty to mark runs to system, as opposed to only method, claims:

"Inline does not cite any affirmative case law which suggests that a patentee may avail itself of the benefits provided by [Section] 287(a), yet does not have a duty to mark merely because its patent contains a system, and not a 'method.' "

Beyond the marking considerations, this case is another example of the high bar set in this district for motions for reconsideration.

<%media(20070112-Inline.pdf|Inline Connection Corp. v. AOL Time Warner Inc., C.A. No. 02-272-MPT (D. Del. Jan. 12, 2007) (Thynge, M.J.).)%>

<%media(20070109-Inline v. AOL (Thynge).pdf|Inline Connection Corp. v. AOL Time Warner, Inc., C.A. No. 02-272-MPT (D. Del. Jan. 8, 2007).)%>

In this discovery ruling, U.S. Magistrate Judge Thynge denied in part Inline's motion to exclude a supplemental expert report as untimely and prejudicial. The supplemental expert report was served three months after the close of expert discovery, more than three and a half months before trial, and nearly three months before the proposed final pretrial order was due. Based on this timing, the Court refused to exclude the report. The Court, however, limited the defendant's ability to use certain declarations in the report and permitted Inline to take depositions of the expert and a third party concerning new prior art listed in the supplemental report.

May a patentee escape the Section 287 marking requirement when only its non-exclusive, non-party licensee produced and sold the allegedly infringed product? A Delaware judge considered, and rejected, that contention in an opinion released last week. Magistrate Judge Thynge instead held that, where the licensee sold and failed to mark the invention, the patentee-licensor could recover damages only after the date it filed the underlying infringement action. <%media(20061213-Inline.pdf|Inline Connection Corp. v. AOL Time Warner Inc., C.A. No. 02-272-MPT (D. Del. December 5, 2006) (Thynge, M.J.).)%>

Plaintiff Inline Communication Corp. sued AOL and Earthlink, alleging infringment of its patented high-speed data transfer technology. AOL and Earthlink moved for summary judgment on the marking issue, claiming that Inline failed to mark certain wall jacks associated with its service and that they first received notice of the alleged infringment on the date Inline filed suit. Inline responded by arguing that it never actually sold any products under the patent, and therefore could not have a duty to mark. According to Inline, the company had also "abandoned" its relationship with the licensee by granting it a paid-up, perpetual nonexclusive license.

The Court rejected Inline's assertions, drawing a distinction between payment and sales:

Whether, as a result of that agreement [granting the nonexclusive license], Inline received or continued to receive any payments, royalties or other compensation is irrelevant. It is the right to make, sell, offer for sale or publically use the patented article that triggers the obligation to mark.

The lesson? Licensors must keep track of the marking activities of their licensees - the duty to mark ultimately runs to the patentee, regardless of the presence or absence of a royalty.

As a party to the litigation, what type of third party documents are considered within my "control" for Rule 34(a) purposes? This is the question that Magistrate Thynge answered in the recent decision of Inline Connection Corp. v. AOL Time Warner Inc., et al., C.A. No. 02-272-MPT, 2006 U.S. Dist. LEXIS 72724 (D. Del. Oct. 5, 2006).

The Court reaffirmed that the District of Delaware does not apply the "practical ability" test set forth by the Second Circuit, but instead will only consider documents to be within a party's "control" if they have a legal right to obtain the documents. Magistrate Thynge distinguished the Third Circuit opinion of Mercy Catholic Med. Ctr. v. Thompson, 380 F.3d 142 (3rd Cir. 2004) where the Court did apply the "practical ability" approach. In that case the relationship between the party litigant and the third party was that of a principal and agent and not between two independent corporations. The test may also be different should the parties have a parent-subsidiary relationship. The take-away message…if you don't believe the party-litigant to have the legal right to obtain the documents you need, make sure to subpoena that third party before the fact discovery cut-off.

Inline Connection Corp. v. AOL Time Warner Inc., et al., C.A. No. 02-272-MPT, 2006 U.S. Dist. LEXIS 72724 (D. Del. Oct. 5, 2006)